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I can't square the incredible performance of the market and health of the US economy with the deficit. If times are so good then why aren't we taking advantage

I can't square the incredible performance of the market and health of the US economy with the deficit. If times are so good then why aren't we taking advantage of the opportunity to pay down some debt or get control of our deficit? I don't even want to think about what happens in a crisis.

rancour 3y ago
Not while we have non-stop propaganda blasting us every which way.
- 2OEH8eoCRo0 3y ago
  Could you please explain what you mean?
EchoChamberMan 3y ago
The wealth is concentrated in the hands of the very few. [Edit] And they have no interest in sharing, or paying off government debts.
- 2OEH8eoCRo0 3y ago
  Are you trying to say that the US economy isn't actually thriving right now?
  - EchoChamberMan 3y ago
    The rich are getting richer, for sure. https://www.victorpest.com/articles/what-humans-can-learn-from-calhouns-rodent-utopia https://www.victorpest.com/articles/what-humans-can-learn-fr...
    - 2OEH8eoCRo0 3y ago
      I understand that. So am I. I just don't follow what that has to do with my concerns.
      - EchoChamberMan 3y ago
        We can perform a thought experiment. You say you're getting richer. I'm getting poorer. Want to give me some money to balance things out? Probably not. The rich don't care about the outcome for the rest of us. They're building bunkers. You should do the same if you can. Sam Altman, or Sama, as people affectionately call him, has guns, anti-biotics, etc. stockpiled in a remote bunker where he can survive the collapse of society.
      - justonenote 3y ago
        You may be getting richer in dollar denominated value, and you may even be getting richer in purchasing power for assets right now, but if asset prices (say housing) are increasing 10%-15% year on year can you maintain that 'getting richer'? Also from the sounds of it, and the fact you are both on HN and doing well in the market right now, implies you are in a pretty good position, compared to the general population. To answer your question more directly, the market is doing well because both the metrics and mechanics of markets are heavily heavily gamed. The 1 trillion dollars that is being added to the US debt is going _somewhere_. You happen to be getting a piece of it which you think is great (understandably), but you can be assured that there are many people above you in the chain getting much bigger pieces, and people lower in the chain getting less and less. A dog hanging around the table of warlords will be a lot better fed than the dogs whos owners just got their harvest taken from them.
        2OEH8eoCRo0 3y ago
        > you can be assured that there are many people above you in the chain getting much bigger pieces This bothers a lot of people but it doesn't bother me. I see it so often that it feels like a flamebait tactic to elicit envy.
        silverquiet 3y ago
        Are there any wealth redistribution efforts that bother you? Like perhaps student debt forgiveness? Or welfare for single mothers?
  - boppo1 3y ago
    He’s not. I am. The wealth of a nation is the goods and services available to its common people. We’ve shifted a lot of economic measures so that we’re really just paying attention to the value of assets as opposed to what they represent. An example: In early February, retail sales numbers came in strong. The stock market went down. Why? Because analysts know that strong retail means a lower likelihood of our central monetary planners lowering interest rates, and lower rates mathematically cause asset values to grow because you’re making the denominator smaller. Stocks should not thrive on denominator changes, but on a growing numerator: earnings. Earnings reflect actual economic activity. But most people have their economics education provided by this regime and think it’s totally fine for the market to be determined by interest rates instead of productivity.
j-j-j-j 3y ago
Why didn't Madoff just slow down to pay off the ponzi during the good times?
- gscott 3y ago
  Why not print money and buy the Magnificent 7 stock, sell over time and pay off national debt!
SkyPuncher 3y ago
Because this debt is largely meaningless - except as a political tool. All countries have debt to the point that it’s basically a big web. What really matters is the trust in the financial system behind the debt. Do other countries believe that the US can take out more debt in good faith? If yes, then this is fine. In individual terms, this is much like having a mortgage. It’s a massive number, much larger than your annual income that you’ll be making payments on for ages. You can still get more debt (credit cards, auto loans, HELOC) because it’s expected that you’ll have a certain amount of debt. Your debt only becomes a problem when you show that you can’t pay it.
- dnissley 3y ago
  If that's the case doesn't it still make sense to try and reduce debt? Due to unforeseen circumstances? Going by your metaphor we could say the possibility of the industry you work in becoming a lot less lucrative due to technological advances, or macroeconomic changes like jobs going overseas -- this isn't an abstract threat! It's happened before and will happen again!
  - SkyPuncher 3y ago
    Yes and no. I'm getting into opinion territory now. Largely, the USA is such a dominate world power that it running into trouble on its debt would mean global repercussions. That unforeseen circumstance would have rippling effect around the world. At which point, it wouldn't really matter if the USA was affected. Everybody else would be affected too.
    - dnissley 3y ago
      Yep, totally get that possibility. We've seen it with the 08 financial crisis, COVID (esp. wrt money printing), and even down to more mundane things like nimbyism + pension underfunding (traps that many/most other developed nations have fallen into). Still it makes me squeamish and makes me want to point out that just because we can't conceive of a threat unique to our particular position doesn't mean that one doesn't exist! But a lot of what drives me to think that is almost certainly just my own risk intolerant disposition, which again comes down to opinion.

rancour 3y ago

Not while we have non-stop propaganda blasting us every which way.

2OEH8eoCRo0 3y ago
Could you please explain what you mean?

EchoChamberMan 3y ago

The wealth is concentrated in the hands of the very few. [Edit] And they have no interest in sharing, or paying off government debts.

2OEH8eoCRo0 3y ago
Are you trying to say that the US economy isn't actually thriving right now?
- EchoChamberMan 3y ago
  The rich are getting richer, for sure. https://www.victorpest.com/articles/what-humans-can-learn-from-calhouns-rodent-utopia https://www.victorpest.com/articles/what-humans-can-learn-fr...
  - 2OEH8eoCRo0 3y ago
    I understand that. So am I. I just don't follow what that has to do with my concerns.
    - EchoChamberMan 3y ago
      We can perform a thought experiment. You say you're getting richer. I'm getting poorer. Want to give me some money to balance things out? Probably not. The rich don't care about the outcome for the rest of us. They're building bunkers. You should do the same if you can. Sam Altman, or Sama, as people affectionately call him, has guns, anti-biotics, etc. stockpiled in a remote bunker where he can survive the collapse of society.
    - justonenote 3y ago
      You may be getting richer in dollar denominated value, and you may even be getting richer in purchasing power for assets right now, but if asset prices (say housing) are increasing 10%-15% year on year can you maintain that 'getting richer'? Also from the sounds of it, and the fact you are both on HN and doing well in the market right now, implies you are in a pretty good position, compared to the general population. To answer your question more directly, the market is doing well because both the metrics and mechanics of markets are heavily heavily gamed. The 1 trillion dollars that is being added to the US debt is going _somewhere_. You happen to be getting a piece of it which you think is great (understandably), but you can be assured that there are many people above you in the chain getting much bigger pieces, and people lower in the chain getting less and less. A dog hanging around the table of warlords will be a lot better fed than the dogs whos owners just got their harvest taken from them.
      - 2OEH8eoCRo0 3y ago
        > you can be assured that there are many people above you in the chain getting much bigger pieces This bothers a lot of people but it doesn't bother me. I see it so often that it feels like a flamebait tactic to elicit envy.
        silverquiet 3y ago
        Are there any wealth redistribution efforts that bother you? Like perhaps student debt forgiveness? Or welfare for single mothers?
- boppo1 3y ago
  He’s not. I am. The wealth of a nation is the goods and services available to its common people. We’ve shifted a lot of economic measures so that we’re really just paying attention to the value of assets as opposed to what they represent. An example: In early February, retail sales numbers came in strong. The stock market went down. Why? Because analysts know that strong retail means a lower likelihood of our central monetary planners lowering interest rates, and lower rates mathematically cause asset values to grow because you’re making the denominator smaller. Stocks should not thrive on denominator changes, but on a growing numerator: earnings. Earnings reflect actual economic activity. But most people have their economics education provided by this regime and think it’s totally fine for the market to be determined by interest rates instead of productivity.

j-j-j-j 3y ago

Why didn't Madoff just slow down to pay off the ponzi during the good times?

gscott 3y ago
Why not print money and buy the Magnificent 7 stock, sell over time and pay off national debt!

SkyPuncher 3y ago

Because this debt is largely meaningless - except as a political tool. All countries have debt to the point that it’s basically a big web. What really matters is the trust in the financial system behind the debt. Do other countries believe that the US can take out more debt in good faith? If yes, then this is fine. In individual terms, this is much like having a mortgage. It’s a massive number, much larger than your annual income that you’ll be making payments on for ages. You can still get more debt (credit cards, auto loans, HELOC) because it’s expected that you’ll have a certain amount of debt. Your debt only becomes a problem when you show that you can’t pay it.

dnissley 3y ago
If that's the case doesn't it still make sense to try and reduce debt? Due to unforeseen circumstances? Going by your metaphor we could say the possibility of the industry you work in becoming a lot less lucrative due to technological advances, or macroeconomic changes like jobs going overseas -- this isn't an abstract threat! It's happened before and will happen again!
- SkyPuncher 3y ago
  Yes and no. I'm getting into opinion territory now. Largely, the USA is such a dominate world power that it running into trouble on its debt would mean global repercussions. That unforeseen circumstance would have rippling effect around the world. At which point, it wouldn't really matter if the USA was affected. Everybody else would be affected too.
  - dnissley 3y ago
    Yep, totally get that possibility. We've seen it with the 08 financial crisis, COVID (esp. wrt money printing), and even down to more mundane things like nimbyism + pension underfunding (traps that many/most other developed nations have fallen into). Still it makes me squeamish and makes me want to point out that just because we can't conceive of a threat unique to our particular position doesn't mean that one doesn't exist! But a lot of what drives me to think that is almost certainly just my own risk intolerant disposition, which again comes down to opinion.